When a VAT payer in one EU Member State makes a supply of goods to a VAT payer in another EU Member State, that is an intra-Community supply. In such case, the place of supply is the place where the goods are delivered after dispatch or transport of the goods (article 40 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax).

VAT is due in the country where the receiver is located, and the supplier must issue an invoice without VAT. However, he can only use the VAT exemption if he proves that his customer is a VAT payer with a valid VAT number (see) and that the goods have been dispatched or transported to the other EU Member State.

The Belgian legislation is quite strict in respect of the obligation of the Belgian supplier to evidence that there has been an intra-Community transport to the other Member State. Article 3 of Royal Decree nr. 52 provides that the supplier must keep a set of commercial documents supporting the intra-Community transport. In practice, the VAT Authorities require any document such as contracts, invoices, purchase orders, payment and transport documents, and they clarify that taken separately, these documents are not acceptable as sufficient evidence, but that they can be sufficient together with other documents. In that respect, transport documents are generally considered essential.

When a Belgian supplier does not charge VAT on an intra-Community supply of goods, the VAT authorities may question that the supply has taken place, in particular where the supplier did not personally deliver the goods in person or when the customer took delivery of the goods in Belgium to transport them back to his own Member State. The penalties are, in particular, quite high, with fines up to 200% of the VAT on these invoices.

Destination Document

In a recent Practice Note nr. E.T. 129.460 dated 1 July 2015, the VAT Authorities admit that the requirements were too stringent in the light of article 273 of Council Directive 2006/112/EC that states that Member States may impose other obligations which they deem necessary to ensure the correct collection of VAT and to prevent evasion, subject to the requirement of equal treatment as between domestic transactions and transactions carried out between Member States by taxable persons and provided that such obligations do not, in trade between Member States, give rise to formalities connected with the crossing of frontiers.

To this effect, they introduce a new form, the Destination Document that will be accepted as a simplified alternative that will evidence that goods have been dispatched or transported and supplied to a VAT payer in another EU Member State.

In this Destination Document the VAT-payer in the other EU Member State certifies that the goods have been received within the EU, irrespective of the terms of delivery terms agreed between parties. A separate document is not required for all intra-Community supplies of goods to the same customer; they can be grouped for periods of three months.

The destination document is drawn up by either the vendor or the purchaser, and it may be sent electronically. It is signed by a representative of the purchaser and mentions received for [the purchaser]. The vendor must have the identity of the representative confirmed by mail or by email.

If the vendor can provide the document that is a valid alternative for the transportation document and can be used to prove the intra-Community supply of goods. However, the VAT Authorities expect that the Belgian supplier will be able to present the sales invoice, the proof of payment, and possibly the invoice for the transport and that he does anything to avoid being involved in a VAT fraud.

The VAT Authorities reserve the right to demand other documents, other than transport documents, to check that the transaction is genuine and that it corresponds with the information mentioned in the Destination Document. In other words, the Belgian VAT-payer is not released of his obligation to provide other documents (such as contracts, invoices, purchase orders, payment and transport documents) to justify the VAT exemption.